DOJ Responds To Megaupload's Accusations Of Misleading The Court... By Misleading The Court

from the that's-how-that-works? dept

We've discussed a few times now how Megaupload is arguing that key elements in the warrant used to criminally charge the company and its principles were misleading to the court. In particular, Megaupload has pointed out that part of the "evidence" for criminal conspiracy was that Megaupload knew about infringing activity on the site, but chose not to do anything about it. However, as Megaupload made clear in its filing, the reason it knew about it was because it was informed that the content was subject to a federal investigation, and that the "evidence" needed to be preserved. As we detailed in our last post on the subject, the DOJ went straight to Megaupload's hosting partner, Carpathia, to let them know about this. Carpathia pleaded with the DOJ to talk directly to Megaupload (after receiving assurances that Megaupload was not the target), but the DOJ rejected that request.

However, since this was evidence of potentially criminal activity, Carpathia told Megaupload about it, implying that the DOJ was making it clear that Megaupload should not delete the files.

Notably, the Government avoided communicating with Megaupload
directly, instead deputizing Carpathia to do so on its behalf. (See June 25, 2010 email from Phil
Hedlund to Mathias Ortmann and Kim Dotcom, Ex. 1 ("Please know that we attempted to
convince the Government to work directly with Mega on this matter, but given the complex
jurisdictional issues, they have been unwilling").) Far from warning Megaupload that the
Government considered it to be part of a worldwide criminal organization, which the
Government even at the time was terming the "Mega Conspiracy," the Government, through its
anointed agent Carpathia, represented to Megaupload that "[w]e have no reason to believe the
[sic] MegaUpload is the target of the investigation."

Megaupload cooperated with the Government and voluntarily arranged with Carpathia to
supply the Government with the files identified in the sealed warrant. In accordance with the
Government's express admonitions--as conveyed to Megaupload through the sealing order and
Carpathia's instructions--Megaupload avoided signaling that anything was afoot or otherwise
compromising the investigation, preserving the files in their original condition without alerting
users or the public that anything had changed. At no time did the Government or Carpathia
indicate that Megaupload could or should remove the files identified in the warrant from its
cloud storage platform without compromising the stated secrecy of the investigation, much less
did they suggest that Megaupload was legally obliged to do so lest it be complicit in an ongoing
criminal conspiracy.

The DOJ has now responded to these claims, and it's done so in its typically misleading fashion. For example, it insists that Megaupload is misleading in its own filing, because the DOJ never directly spoke to Megaupload. They leave out the whole part about the DOJ talking to Carpathia, who had to talk to Megaupload if it wanted to preserve the evidence in question without risk of it being deleted. But, no, in the DOJ's version, this is all just Megaupload fantasy talk.

Megaupload's pleading and the search warrant materials at issue disproves the allegation that the government
misled the court as part of a conspiracy to entrap Megaupload. For instance, Megaupload alleges
that the government "affirmatively [led]" Megaupload to retain certain files on its servers.... Yet Megaupload does not cite a single communication between the government and
Megaupload or a single instruction from any member of the government to Megaupload; there
are none.

Notice the lack of any mention of the Carpathia communications between the DOJ and Carpathia, or between Carpathia and Megaupload. That seems like relevant info that the DOJ conveniently just skips right over.

Is this really the best argument that the DOJ can put forth? The filing also does highlight that the DOJ made other arguments against Megaupload in its filings -- which is true -- but it doesn't mean that the questionable aspects concerning some of the key claims should simply be ignored, as the DOJ would prefer.